The offer is for a minority stake in Italy’s former phone
monopoly, said the person, who declined to be identified because
the talks are private. Sawiris “declined to comment about
rumors circulating in the media,” Orascom Telecom Media &
Technology Holding SAE spokeswoman Manal Abdel-Hamid said.
Telecom Italia officials didn’t return calls and e-mails.

Telecom Italia’s management board discussed a bid from
Sawiris at a meeting on Nov. 8, Corriere della Sera reported
Nov. 10. The offer is for as much as 5 billion euros ($6.4
billion), though the amount the businessman plans to invest
wasn’t discussed by management, according to the newspaper.
Milan-based Telecom Italia has a market value of almost 13
billion euros after falling 17 percent this year.

“Telecom Italia is so distressed something has to
happen,” said Robin Bienenstock, an analyst at Sanford C.
Bernstein In London. “M&A will drive the share price up and if
there is resistance to Sawiris, Telecom Italia may have no
choice but to do a deal with Cassa Depositi.”

Telecom Italia is considering a plan to spin off its fixed-
line network, and Chief Executive Officer Franco Bernabe (BNBC) has
said there is an “open dialogue” with state lender Cassa
Depositi e Prestiti SpA about a possible investment in the
network. Buying a stake in Italy’s biggest phone company would
mark Sawiris’s return into the market a year after he sold
mobile operator Wind Telecom SpA.

Shares Fall

Telecom Italia on Nov. 9 reported a 13 percent decline in
net income to 681 million euros from a year earlier. The company
is suffering as competition and the region’s sovereign debt
crisis crimp sales and profit margins.

The shares gained 3.7 percent to 69.1 cents in Milan
trading on Nov. 9. The shares traded at a 15-year low of 61
cents on July 24.

Sawiris last year merged Italy’s Wind with VimpelCom Ltd. (VIP)
This year, he added gold to his investments after agreeing to
buy Canada’s La Mancha Resources Inc. (LMA) The Sawiris family also
has interests in construction, fertilizer, cement, real estate
and hotel development.